Syrah Resources has secured a $53 million loan waiver from the DFC following defaults linked to its Balama mine in Mozambique, where protests have restricted access. The waiver allows access to working capital while production remains suspended. Despite prior plans to restart operations, ongoing civil unrest continues to pose challenges for the company in the region.
Syrah Resources, a publicly traded Australian graphite producer, has received a $53 million loan waiver from the International Development Finance Corporation (DFC) of the United States. This waiver comes in light of recent defaults triggered by circumstances surrounding the Balama graphite mine in Mozambique. The company had previously declared force majeure on 12 December due to protests that hindered access to the mine, although it has successfully managed to avoid defaulting on its repayment obligations related to its $150 million DFC loan and its $102 million loan from the US Department of Energy.
The DFC’s waiver pertains specifically to the initial tranche of the loan to Syrah and aims to provide necessary working capital for the Balama operations. Despite operational staff having departed from the mining site, security personnel remain to ensure safety and stability. The DFC’s agreement allows Syrah to access the remaining portion of the loan contingent upon the resumption of production at Balama; however, no definite timeline for recommencing operations has been disclosed.
Production at Syrah’s Mozambican facility ceased in July owing to an adequate supply of graphite inventory and a decrease in demand for graphite fines. During the second quarter, the company produced 24,000 tonnes of graphite, subsequently focusing on depleting existing stockpiles throughout the next quarter. Although Syrah had intentions to reinstate production between September and December 2024, these plans are subject to change based on external conditions.
Protests in the Balama region began in September and intensified following the Mozambique Supreme Court’s endorsement of the results from the October general elections, which reaffirmed the ruling Frelimo party’s hold on power. Syrah has reported persistent operational challenges in Mozambique, exacerbated by ongoing protests that disrupt operations and affect stability in the region.
Syrah Resources is an Australian-based graphite producer known for its operations in Mozambique, specifically at the Balama mine, which is one of the world’s largest sources of graphite. The company’s recent challenges stem from civil unrest and protests that started in the Balama area, significantly affecting access and operations at the mine. The DFC loan supports the company’s financial stability, enabling it to navigate through periods of operational halt while addressing local socio-political concerns.
In conclusion, Syrah Resources has successfully secured a key loan waiver from the DFC amid ongoing challenges at its Balama mine due to civil unrest. While the company is currently unable to resume production, it is maintaining its financial commitments and focusing on operational stability. The situation underscores the impact of local governance and public sentiment on critical mining operations, especially in politically sensitive regions.
Original Source: www.argusmedia.com
